Home Headline News Dow Jones Industrial Average (.DJI) Recession fears overdone?

Dow Jones Industrial Average (.DJI) Recession fears overdone?

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New York, USA - July 29, 2016: The illuminated Dow Jones sign in times square late in the night as the latest news streams on the led board.

Dow Jones Industrial Average (.DJI) Recession fears overdone?

The Dow has lost almost 6% in May, leaving it on track for its first losing month of 2019. The Dow hasn’t had a losing May since 2012. The CNN Business Fear & Greed Index is flashing “fear,” compared with “greed” a month ago.

The wave of selling brought back memories of December, when economic and trade fears delivered the worst month on Wall Street since the Great Depression. The extreme turbulence nearly ended the decade-long bull market in US stocks.”I don’t think this is the start of a bear market,” said Block.

Even though the yield curve has inverted and manufacturing is struggling, other economic indicators look relatively healthy. Most notably, the United States added 263,000 jobs in April, lowering the unemployment rate to a 49-year low of 3.6%.”While fears are definitely justified regarding tariffs and weakness abroad, the US economy is still on very solid footing,” said Mike Loewengart, vice president of investment strategy at E*Trade.Investor moves into safe havens like utilities and bonds, Loewengart said, “doesn’t mean we’re anywhere near a recession.”

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 25,752.87.

The projected upper bound is: 25,673.73.

The projected lower bound is: 24,547.59.

The projected closing price is: 25,110.66.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 5 falling windows in the last 50 candles–this makes the current falling window even more bearish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 22.3738. This is not an overbought or oversold reading. The last signal was a sell 24 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 33.69. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 10 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -203.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 22 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -221.359 at 25,126.410. Volume was 1% below average (neutral) and Bollinger Bands were 12% wider than normal.

Open High Low Close Volume___
25,231.46125,231.46124,938.24025,126.410 298,930,432

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 25,615.89 26,047.55 25,430.72
Volatility: 13 14 20
Volume: 283,969,792 290,270,848 318,964,864

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

DJ INDU AVERG gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
DJ INDU AVERG is currently 1.2% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of .DJI (mildly bearish). Our trend forecasting oscillators are currently bearish on .DJI and have had this outlook for the last 14 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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